What’s the best way to reattach a piece of siding

I worked concrete one summer while I was in high school, but I'm no expert and it was a long time ago. That being said, here's what I would try:

I'd give both of your solutions a shot first. However, if you end up completely destroying the two chips, I'd try to pour a new corner. Drill two holes into the corner of the foundation and dowel into it with a few inches of 3/8" re-bar. After you've hammered in the steel, form up the corner and pour the concrete.

Also, this forum includes discussion about how to repair similar cracks.

This website also explains a bit more about this type of foundation crack:

Brick that is laid directly in contact with concrete foundations can cause angular cracks like this in the top 12 - 16 inches of a foundation. These cracks are caused by the brick expanding and pushing the outer corner of the foundation with it. The cracks are not major structural problems.

It is often pointless to repair them as the next time it gets hot, a crack will likely appear in your repair material.

Since you're going to have the walls open, I would use pre-faced fiberglass batting. The rolls give you more flexibility than the pre-cut batts if you have non-standard height walls and they're usually a little cheaper per square foot, but I see special offers in the big-box stores all the time so shop around.

There's no special trick to installing it, but wear a dust mask that's rated for fiberglass dust. The vapor barrier goes on the warm side. I usually cut pieces to length before installing them in the wall (but I'm an engineer and can't help myself! :), but you can cut it to size while it's in the wall if you're not as OCD as me: put the loose end at the top of the wall, unroll and stuff until you reach the bottom then cut it off. Run a bead of adhesive along the stud, then unfold the flaps at the edge of the insulation on one side of the stud and press into the adhesive. Repeat for the insulation on other side, then staple the two of them into the stud. Tap the staples in with a hammer if they didn't go all the way. Done!

I don't have a book recommendation, but it's easy to learn how to do it.